IntroductionWith the accumulation of research on market orientation since the 1990s (Kohli & Jaworski, 1990; Narver & Slater, 1990), a consensus seems to be emerging regarding the impact of market orientation. Briefly put, it has been indicated that market orientation has a positive impact on performance through innovation, perceived quality, and loyalty (Kirca, Jayachandran, & Bearden, 2005). However, as most prior studies assume that the unit of analysis is the SBU (Kohli & Jaworski, 1990; Narver & Slater, 1990), limited attention has been paid to the nature of market orientation in the context of service where direct interaction with customers is required (Kosuge, 2015). This paper empirically examines the impact of market orientation in such a context.Specifically, this paper focuses on continuous improvement, or kaizen,1 which is a key concept in operations management, to test the hypothesis that market orientation leads to continuous improvement. The basis of this hypothesis is the idea that a value system that emphasizes sensing and responding to existing and latent customer needs promotes opportunities to improve existing work methods and tools. This hypothesis is based on the findings of Kosuge and Takahashi (2016), who considered the process through which a Japanese automobile dealership company developed a market orientation and is also supported by existing literature. If this hypothesis is true, it would suggest that market orientation is far more than a in the service context (Kirca et al., 2005).Market Orientation and Kaizen ReadinessKosuge and Takahashi (2016) describe a case of an automobile dealership company that made a long-term shift from a traditional selling orientation dependent on individual skills to a process-focused market orientation. An overview of this case is provided below.• The market orientation program focuses on processes; moreover, the team was perceived by salespersons as threatening their concept of themselves as lone wolves. It was thus rejected by most of them.• However, among the 54 shops, three shops that were performing poorly adopted market orientation. Subsequently, these shops began a continuous reassessment of their existing work methods and tools and devised various improvements. As the staff accumulated successful experiences, shops that had merely been groups of individualistic salespersons began to function as a single organization.• The top management selected managers from these three shops and modified the existing evaluation and reward system to spread the form of market orientation within the organization.It is particularly noteworthy that at these shops, the adoption of market orientation engendered values geared toward sensing and responding to customers' needs; this consequently promoted a continuous update of operations. For example, in the past a particular salesperson had been assigned to each customer. The shops moved to a system whereby a sales team, and not just a particular salesperson, would be responsible for taking care of the customer. Further, follow-up cards were employed in the past to monitor and control such customer contact activities, reminding them to ensure that their car was inspected. These follow-up cards were refined as tools for salespersons to ensure dialogue with their supervisors about customers.Kaizen, or continuous improvement, can be viewed as a learning process, so the above findings are consistent with prior studies that highlight learning orientation as being a mediator between market orientation and performance. For example, Slater and Narver (1995) stated that market orientation is the principal cultural foundation of the learning organization. In other words, a market-oriented organization will create a cultural framework that leads to the development of learning orientation (Farrell, 2000).Based on the above observation and discussion, rather than the idea of market orientation being a hygiene factor in the service context (Kirca et al. …